UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15688 / <>
SECURITIES AND EXCHANGE COMMISSION V. NICHI CAPITAL, LTD.,
OLAWANDE A. AGUNLOYE, WISE CHOICE DISCOUNT BROKERAGE, INC., RALPH
ANTEBY, AND BRIAN WALFISH, AND STRATEGIC RISK MANAGEMENT AS
RELIEF DEFENDANT, 98 Civ. 2218 (CJH) (S.D.N.Y)
The Securities and Exchange Commission ("Commission") announced
today that it filed a complaint in federal court in Manhattan
charging a start-up software company, its president, and a
brokerage firm and its employees, with obtaining at least
$200,000 by engaging in an ongoing securities fraud. Since
October 1997, the defendants have been inducing investments in
the securities of Nichi Capital, Ltd. (Nichi) by misrepresenting
to investors that they were selling Nichi stock in an initial
public offering (IPO). The court granted the Commission's
request for emergency relief, including a temporary restraining
order, an asset freeze, and an accounting.
Named in the complaint are:
Nichi Capital, Ltd., a New York corporation.
Wise Choice Discount Brokerage, Inc. (Wise Choice), a New
York corporation, and a broker-dealer registered with the
Commission.
Olawande A. Agunloye (Agunloye), president of Nichi and a
principal of Wise Choice. Agunloye resides in New York.
Ralph Anteby, a resident of Brooklyn, New York, and a broker
at Wise Choice.
Brian Walfish, a resident of Brooklyn, New York, and a
broker at Wise Choice.
Also named in the Complaint as a relief defendant is Strategic
Risk Management, a Delaware corporation and a broker-dealer
registered with the Commission.
Specifically, according to the Complaint, the defendants
misrepresented to investors that the IPO was going to take place
shortly, that their shares would rise greatly in value after the
company went public, that their money would be placed in an
escrow account until the IPO took place, and that the money
raised would be used for certain defined purposes. Those
statements were false and misleading because, while Nichi had
filed a registration statement for an initial public offering of
its stock, the IPO was not expected to take place in the near
future. Moreover, no escrow account for the IPO funds was ever
established, and the investors' money was transferred by
Agunloye, at least in part, to relief defendant Strategic in
connection with his attempt to acquire an equity interest in that
company.
The Commission seeks a final judgment permanently enjoining the
defendants from further violations of Sections 5(a) and 17(a) of
the Securities Act of 1933, and Section 10(b) of the Securities
Exchange Act of 1934, and Rules 10b-5 and 10b-9 promulgated
thereunder; and ordering them to account for and disgorge their
ill-gotten gains and prejudgment interest, and to pay civil
penalties. The Commission also seeks an order requiring
Strategic to account for and disgorge an amount equal to the
funds it improperly obtained from the defendants.
A hearing on the Commission's application for a preliminary
injunction and other relief is scheduled for Wednesday, April 8,
1998.